MARKET CLOSE: Shares mixed as Xero, Orion fall, F&P gains on earnings outlook

New Zealand shares were mixed as Xero and Orion Health Group extended their decline, while Fisher & Paykel healthcare rose on a strong full-year earnings outlook.

The S&P/NZX 50 Index fell 0.87 points, or 0.01 percent, to 6100.15. Within the index, 23 stocks rose, 21 fell and 6 were unchanged. Turnover was $243.4 million.

Xero led the index lower, falling 4.7 percent to $19.15. The cloud-based accounting software developer has dropped 6.9 percent since last Thursday, when managers including founder Rod Drury sold 2.5 million shares in the company, taking advantage of a 35 percent rally in the stock this year.

"Executives selling stock always raises question marks, and indeed we've seen that stock come back," said Shane Solly, director at Harbour Asset Management. "They've made fantastic returns, good on them."

Orion dropped 2.9 percent to $3.40. The healthcare system software developer has fallen 10 percent since it announced a wider first-half loss last Wednesday. The company said it is forgoing short-term profits in a bid to build a global business of scale.

F&P Healthcare was the best performer on the NZX 50, rising 3.3 percent to $8.41. Last Friday, the medical device maker increased first-half profit by 27 percent and affirmed its expectation for full-year earnings.

"As people have gone through it and understood the margins and future growth potential, the market's starting to see a longer flight path for Fisher & Paykel," Solly said.

Intueri Education Group rose 42.9 percent to 50 cents, after plunging to a record low on Friday, finishing the week at 35 cents having started at $1.30. Last Monday, Intueri said the Tertiary Education Commission was reviewing funding, which could reduce its 2015 earnings by between $4 million and $5 million. Confidence in the sector was dented on Thursday when Australian education provider Vocation was placed into voluntary administration after the Victorian government withdrew A$20 million in funding amid criticism of the company's courses, and investors declined to provide extra funds.

New Zealand's largest private training institution said today it's in a sound financial position, "with strong margins and cash flows, appropriate funding and the full support of its bankers."

"We are taking some heart from what's been said, but recognising there's still some way to go here," said Solly, whose employer Harbour Asset Management owns 7.5 percent of Intueri. "The company has come out with some statements which clarify where issues may or may not lie. It's not unusual for stocks to go through extremes when there's lack of information or lack of clarity."

Vector dropped 0.6 percent to $3.10 The electricity and gas network operator will immediately repay $540 million of bank debt on completion of the sale of its gas transmission and distribution assets outside Auckland, although the savings in interest costs won't make up for the reduction in operating earnings.

Fonterra Shareholders' Fund fell 0.4 percent to $5.52. Fonterra Cooperative Group and Bellamy's Australia have entered into a five-year, multi-million dollar deal to manufacture a range of new baby nutritional powders at the Darnum infant formula plant in southeast Victoria.

Finzsoft Solutions dropped 9.1 percent to $3. The financial software developer posted a 93 percent slump in first-half profit as costs more than doubled on unexpected costs related to app developer subsidiary Sush Mobile.

NXT-listed Snakk Media rose 2.2 percent to 4.7 cents. The company, which aggregates publishers' advertising space on mobile devices and matches it to advertisers' demand, narrowed its first-half loss as it fattened margins on increased revenue, led by faster growth in southeast Asia.

G3 Group was unchanged at 83 cents, as it has been since Sept. 1. The mail operations and document management company reported a 29 percent decline in first-half profit as it bore one-off costs from listing on the NXT market and restructuring its business, and as sales fell from a year-earlier boom when customers got in ahead of a postage price hike.

(BusinessDesk)